Stock Based Merger Arbitrage Spreads
Calculating Stock Based Merger Arbitrage Spreads – Barrick (ABX) & Randgold (GOLD) – An Example
Is it possible that when calculating stock based merger arbitrage spreads the deal spread in the offer can trade at a premium? A value ABOVE the offer price as calculated from the acquirer stock price? This article analyses in depth and explains how and why this spread premium is possible. We also give an example how the arbitrageur can profit from similar situations.
